Government asks states to accept power tariff in digital transactions only

NEW DELHI: The government has asked states to stop accepting electricity bill payments in cash and move to digital mode, a move that can be a giant leap towards a cashless economy as power worth lakhs of crore is consumed every year.

The Union power ministry has told state distribution companies to introduce and strengthen online and digital payment mechanism, to begin with in urban areas and gradually to all electricity consumers, power secretary PK Pujari told ET.

Data available with the Central Electricity Authority (CEA) showed that 1,134,631 million units of electricity was supplied across states during April 2016 and March this year. Shifting to an efficient digital payment mechanism could generate Rs 340,389 crore, going by a conservative estimate of Rs 3 per unit tariff.

“The main money collection in the power sector is through distribution companies. We have asked the states to take measures so that consumers pay through e-payments as far as possible, which could be through net banking, debit cards or credit cards,” Pujari said.

The power ministry will deliberate on ways to promote cashless electricity bills payment in a meeting this week. Power, coal, renewable energy and mines minister Piyush Goyal is scheduled to meet power ministers of all states in Delhi in a two-day conference on Wednesday.

The move towards e-payment of electricity bills is in sync with recommendations of the committee of chief ministers on digital payments headed by N Chandrababu Naidu to switch all government sections like insurance, educational institutes, fertilisers, electricity and petroleum to digital payments.

Pujari said the move was in the interest of a cashless economy as well as for efficient electricity bill collection. The power ministry’s Urja portal showed that in urban areas mapped by the Integrated Power Development Scheme for IT enablement, 12.4 per cent of electricity consumers made digital payments for electricity bills. This was a quantum jump from 8.6 per cent digital payments made in October 2016.

“For promotion of digital payments, power distribution companies in the states need to map consumers, their consumption and other details, which indirectly helps in efficient collection and is one of the objectives of the reform,” Pujari said.

Another government official said there will be bandwidth and internet connectivity issues in rural areas for digital payment, but the no-cash acceptance programme can be implemented in all urban areas to start with. “Covering all electricity consumers will take longer, say 2-3 years.

In our interactions, most states have shown willingness to shift to cashless electricity bill collections,” he said.